EconomicCrisis.US

Last autumn’s global financial crisis set off an economic earthquake. And we are still feeling the tremors. The latest sign of the ground shifting beneath our feet is our report today of plans by Gulf states, China, Russia, France and Japan to end their practice of conducting oil deals in US dollars, switching instead to a diverse basket of currencies.

It is not hard to see the motivation for oil exporters to move away from the dollar. The value of the US currency has fallen sharply since last year’s meltdown. And fears are growing, in the light of a spiralling US government deficit, that a further depreciation is likely. They do not want to sell their wares in return for a currency with an uncertain future.
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A fusillade of economic reports released Thursday showed the economy’s rebound off the bottom seems to be leveling off, and that any recovery may come in fits and starts over the rest of the year.

Some figures, like an increase in construction spending and the number of home sales under contract, do suggest continuing growth. But a rise in first-time unemployment claims and an unexpected drop in manufacturing activity showed that some forecasters’ expectations may be too optimistic.

“We don’t think we’re going to come out of this unscathed and be back to business as usual,” said Scott Anderson, senior economist at Wells Fargo. “Consumers will continue to be suffering from the headwinds of the financial crisis. Debt levels remain too high.”
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A year after the financial system nearly collapsed, the nation’s biggest banks are bigger and regaining their appetite for risk.

Goldman Sachs, JPMorgan Chase and others – which have received tens of billions of dollars in federal aid – are once more betting big on bonds, commodities and exotic financial products, trading that nearly stopped during the financial crisis.

That Wall Street is making money again in essentially the same ways that thrust the banking system into chaos last fall is reason for concern on several levels, financial analysts and government officials say.
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The truth now is: “He who prints the money makes the rules” — at least for the time being. (…) The goals are (…): compel foreign countries to produce and subsidize the country with military superiority and control over the monetary printing presses.
Ron Paul

In November of last year, at the third extraordinary Summit of Heads of State and Government of the Bolivarian Alternative for the Peoples of Our America (ALBA) – Peoples’ Trade Agreement (TCP), the presidents came together with the intention of confronting the crisis of the global capitalist system. Considering the volatility of the international financial system, the untenable situation of the capitalist model with its destructive logic, and the absence of proposals and categorical measures by the big global power centers in order to confront the crisis, the presidents of the ALBA member States shared the opinion that the international financial system cannot simply be re-founded but has to be replaced by a different one, based on solidarity, stability, ecological sustainability and social justice. The Heads of State concurred with each other in that the countries of our region, if their response to the crisis intends to be efficient, definitely have to break lose and protect themselves from the grip of transnational capital so as to be able to take a different direction that does not make them dependent on the eroded international economic and financial system, nor on the US dollar hegemony, artificially maintained and literally imposed by force. To this effect, they agreed on creating a Latin American monetary zone that would, in its first phase, comprise the ALBA member States and it was further detailed that the monetary zone would count with a Chamber for the Compensation of Payments and a Stabilization and Reserve Fund, financed by the contributions of its member States. What concerns the economic policies of the future Latin American monetary and economic zone, the Heads of State agreed on the implementation of an expansive policy of demand stimulation, Keynesian in nature, promoting investments to further the development of complementary economic activities. (1)
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